He who fights with monsters should be careful lest he thereby become a monster. And if thou gaze long into the abyss, the abyss will also gaze into thee.
---Friedrich Wilhelm Nietzsche

Friday, July 23, 2010

Still Waiting

And we are still sitting here waiting for "The Call". Debbie had two possible start dates; Monday and mid-August. We're assuming that she won't be starting on Monday given that she has not heard anything as of this morning. If they do contact her and want her to start on Monday, we'll be doing some serious scrambling over the weekend. In the more-likely event that we hear nothing, or they want her to start in mid-August, we will probably finish up whatever packing we can do right now, then take off for Michigan sometime next week, hang out there until after Debbie's family reunion, then scoot back here, finish packing and be off for Florida. At least that's the plan as of this morning. I'm sure we'll have a new plan by tomorrow.

I'm playing with making movies out of our photos with Picasa and Pinnacle Studio 12 (the software that came with our Dazzle). I tried it once before and didn't really like the results, but I figured I would give it another shot and mess with the settings a bit. One thing I noticed right off is that Picasa only makes .wmv files. I hate the artifacts that compressed video produces; stationary objects in the background shifting around, blocky areas whenever there is a large chunk of a single color, parts of people's faces becoming detached from their heads, etc. Anyway, the whole point of the exercise is to figure a way to get our photos distributed to my non-internet parents that doesn't involve paying 10-20 cents per print for each of our 10,000 or so digital photos. We're giving them our old VCR/DVD player when we head back to Michigan along with (hopefully) a pile of DVD's of some of our trips so they have something to play on it.

In the Gulf, the cap is holding and the relief well is looking good. As an antidote to the alarmist post I linked to a couple days ago, we have a letter from someone actually working at the site. Bottom line is that Matt Simmons is a complete nut-job. At least according to someone working indirectly for BP. This is what I love about the internet; here we have two people, both with strong credentials in the oil industry that don't just disagree on a few minor points, but rather flatly contradict each other. Sort of like global warming. And health care. And education. And peak oil. And nuclear energy. And... Then the pundits wonder why the general public tells the lot of 'em to go to hell.

Borrowing a page from patent trolls, the CEO of fledgling Las Vegas-based Righthaven has begun buying out the copyrights to newspaper content for the sole purpose of suing blogs and websites that re-post those articles without permission. And he says he’s making money.

I'm sure he is. America used to be about making things. Now we just play stupid legal and financial games.

Speaking of which, Wal-mart is giving the federal government a taste of its own medicine. While part of me cheers for Wal-mart, the idea that a corporation can muster the resources to fight the government to a stand-still is disconcerting. While everyone is justifiably concerned about corporations that are too big to fail, should we not also be concerned about corporations that are too big to control?

Speaking of too big to fail, the bank bail-outs continue with the total amount now standing at $3.7 trillion and growing by approximately one TARP per year. All without a single vote in Congress. Amazing.

One of the things people left Europe and came to the US to get away from was the European ruling class, which currently operates under names such as the Council of the European Union and the European Central Bank. The US in turn, has always had a significant fraction of people with the desire to "be European". Those people now have their wish:

As over-leveraged investment houses began to fail in September 2008, the leaders of the Republican and Democratic parties, of major corporations, and opinion leaders stretching from the National Review magazine (and the Wall Street Journal) on the right to the Nation magazine on the left, agreed that spending some $700 billion to buy the investors' "toxic assets" was the only alternative to the U.S. economy's "systemic collapse." In this, President George W. Bush and his would-be Republican successor John McCain agreed with the Democratic candidate, Barack Obama. Many, if not most, people around them also agreed upon the eventual commitment of some 10 trillion nonexistent dollars in ways unprecedented in America. They explained neither the difference between the assets' nominal and real values, nor precisely why letting the market find the latter would collapse America. The public objected immediately, by margins of three or four to one.

When this majority discovered that virtually no one in a position of power in either party or with a national voice would take their objections seriously, that decisions about their money were being made in bipartisan backroom deals with interested parties, and that the laws on these matters were being voted by people who had not read them, the term "political class" came into use. Then, after those in power changed their plans from buying toxic assets to buying up equity in banks and major industries but refused to explain why, when they reasserted their right to decide ad hoc on these and so many other matters, supposing them to be beyond the general public's understanding, the American people started referring to those in and around government as the "ruling class." And in fact Republican and Democratic office holders and their retinues show a similar presumption to dominate and fewer differences in tastes, habits, opinions, and sources of income among one another than between both and the rest of the country. They think, look, and act as a class.

Some indications as to how the ruling class thinks and how it views us in the underclass:

The ruling class tells us the Bush tax cuts that expire at the end of the year only affect the rich. They don't, of course, but we in the underclass are numerically illiterate when it comes to our personal finances and will never know the difference.

Total household credit has contracted for seven straight quarters. Mortgage debt is down $462 billion from the peak, which it reached in November 2008. Bank-card borrowings, which peaked two months later, are off $126 billion. Auto loans have fallen $122 billion; home-equity lines, $77 billion.

To peruse such figures is to get a whole new sense of America’s economic crisis. The bank failures and bailouts of the fall of ’08 called to mind a great and terrible battle. The drone of falling credit numbers since then suggests a ponderous army in drawn-out retreat. As Stephanie Pomboy, publisher of the newsletter Macro­Mavens, has pointed out, government transfers like stimulus spending and tax credits masked the effects of diminishing credit for a while. That is to say, even if people were unwilling to borrow, they were happy to spend money they got from the government. Now that government supports are being pulled away, the effects of deleveraging are in plain view. Home and car sales are plummeting again. Job growth has shrunk to a sliver. Personal bankruptcies are soaring. Deflation, a dangerous state of economic dead air, when prices fall from lack of demand, is a distinct possibility.

Got that? Living within your means is bad for the economy. I hope you are all hanging your head in shame. Modern economic theory is such fun, especially when it face-plants into reality. I'll leave you with some comforting thoughts from a Wall Street insider:

"Life is such a fucking disaster," a prominent New York hedge fund manager said recently. "We all live in some kind of world we create for ourselves. And I think that what happened is that built into that world were very enlarged expectations about what life was going to be. There's been this sensation of excessive expectation that, frankly, became unsustainable."